Boykin Lodging Company (NYSE: BOY), an upscale, multitenant hotel real estate investment trust, today reported higher revenues and earnings for its 1998 first quarter.
For the three months that ended March 31, 1998, Funds From Operations (FFO) were $7.2 million, or $0.57 per share/unit, a 25 percent increase from $5.8 million, or $0.53 per share/unit, for the same period in 1997.
Percentage lease revenues for the first quarter of 1998 increased 51 percent to $10.9 million from $7.2 million for the first quarter of 1997.
On a same-unit basis, total hotel revenues were $33.3 million, a two percent increase from $32.6 million a year ago. REVPAR, or room revenues per available room, increased very slightly to $54.11 from $53.99 last year. Occupancy during the first quarter of 1998 was down slightly to 60.9 percent from 62.7 percent. The average daily rate increased 3.2 percent to $88.82 from $86.06.
Net income for the 1998 first quarter was $3.6 million, or $0.32 per share (basic and diluted), an eight percent increase from net income of $3.4 million, or $0.36 per share (basic) and $0.35 per share (diluted), for the same period in 1997.
“The 1998 first quarter was a good beginning to Boykin Lodging’s second full year as a public company,” said Robert W. Boykin, chairman, president and chief executive officer. “On a same-unit basis, revenues, income, and funds from operations were up. Between March 31, 1997, and March 31, 1998, we increased the number of hotels in our portfolio from 12 comprising 2,908 rooms to 19 comprising 5,136 rooms. We also added three high-quality, third-party tenants to manage many of the hotels acquired during that twelve-month period.”
“The real story behind the numbers is the performance improvements of the ten hotels acquired since our initial public offering in November 1996,” Mr. Boykin said. “For this group, hotel revenues increased 14.7 percent, REVPAR increased over 12.4 percent, occupancy increased 2.9 percent, and the average daily rate increased 9.2 percent. In comparison, the statistical performance of the nine hotels in our initial portfolio was not as strong, in part because of renovation activity and lower Florida occupancy, which reduced the occupancy level of the nine hotels by nearly six percent.”
“In the first quarter of 1998, we acquired the 317-room Hilton Hotel in Knoxville, Tennessee, and the 251-room Radisson Hotel in High Point, North Carolina, from a Detroit-based partnership for a purchase price totaling $37 million, or approximately $65,000 per room,” Mr. Boykin continued. “Each hotel is the finest in its market, with a premier downtown location and upscale, full-service hotel amenities.”
“Our acquisition program continues to have many excellent prospects,” Mr. Boykin said, “and we are in discussions with several additional acquisition candidates. In the first three months of 1998, we issued 4.5 million common shares to the public under a shelf offering and used the $106.3 million in proceeds to fuel our acquisition program. We also added a second senior vice president of acquisitions, effectively doubling our growth capacity.”
Still pending final closure is the acquisition of the Pink Shell Beach Resort in Ft. Myers Beach, Florida, which, if approved by the seller’s limited partners, would expand Boykin Lodging’s portfolio to 20 properties and 5,344 rooms. Also pending approval by shareholders is an agreement announced on December 31, 1997, under which the company would acquire from Red Lion Inns, L.P., ten full-service DoubleTree hotels containing 3,062 rooms in total. The shareholder meetings to vote on the Red Lion transaction are scheduled for May 20, 1998.